December 27, 2017
An Insider Look at the 2018 Housing Market
Market timing can be in an incredibly difficult task; whether in the stock market, bond market, or real estate market. The idea of perfectly timing a buy low, sell high scenario is especially difficult in the housing market as more often than not, a buyer is selling simultaneously. While we would never claim to perfectly time the market, we try to lean on our experience and knowledge of the real estate market to help guide buyers and sellers through the ups and downs of the market.
First and foremost, we do think housing prices will increase in 2018, albeit, at a slightly slower pace than 2017. On average, we can expect year-over-year increases in the value of land to be around 4%. We think this will continue in 2018, as well as some modest appreciation in the value of the home. Supply and demand will continue to be the dominant theme in the real estate market, especially for millennial homebuyers. These young professionals are getting older, they’re improving their financial situations, and we believe they will account for an even higher percentage of homebuyers in 2018.
We also believe external factors will play a larger role than we’ve seen in recent years. The biggest impact will likely come from the tax reform bill that is currently making its way through Congress (as this is being written). There are many points in the potential bill that could impact the real estate market and homeowners such as; standard deduction amounts, state and local tax (SALT) deductions, mortgage interest deductions, and the possible elimination of interest deductions on a second home. This may all add up to higher cost of homeownership, but the desire to be a homeowner still outweighs those considerations.
Our predictions won’t be perfect, but having a real estate agent that can harness raw data and give you sound, reliable advice can make the real estate market feel like less of a gamble and more like an opportunity.